When you?re thinking of buying an investment property, you?re thinking of becoming an owner of a land which you can manage, rent out or sell for a profit. The property is also usually improved in order to increase its value in the market. If you are planning on buying an investment property, you must be able to know and manage the cash flow of this particular asset. If you are knowledgeable in these aspects, then you will definitely notice substantial returns.
Basic Rental Property
Basic Rental Property is a type of real estate investment involves buying a piece of land and then renting it out to a tenant. The owner of the land will be the one who will pay for the property?s taxes, costs of maintenance, and mortgage.
All these expenses are usually covered by the monthly rent, and once the mortgage has been paid off then this percentage will become profit for the landowner. Through time, the property?s value would have appreciated as well. Naturally, there are risks involved with this set up, for instance you will have a destructive tenant or one who doesn?t pay dues on time, which means that you will need to shoulder the mortgage at times. In order to avoid this situation, you need to think of one very important thing when it comes to investing in real estate: LOCATION.
Real Estate Investment Groups
Real Estate Investment Groups is another type of investment wherein you can be part of the group that has pooled resources to invest on property that will be rented out. You won?t have to worry about the concerns that a landlord has as the company will take care of these issues for you and the other investors. What happens is that you will buy property from the group, such as a condo, which will then be rented out by the company and you will simply be getting profit.
Trading Real Estate
The riskiest but most rewarding is when you?re trading real estate. What happens here is that traders will purchase the properties with the idea of holding them for a particular amount of time (about 3 to 4 months) and then selling them off with profit.
Buying an investment property can be stressful, that is why finding a good real estate agent is important. You can ask for references from trusted and experienced friends and prepare a questionnaire to interview your potential agent.
Click here for more information on Buying an investment property.
Source: http://www.thirdagemedia.com/introducing-real-estate-investment/
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